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Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. FederalWay, Incorporated, is one of America's most prestigious retailers.
Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. FederalWay, Incorporated, is one of America's most prestigious retailers. Each Christmas season, FederalWay builds up its inventory to meet the needs of Christmas shoppers. A large portion of these Christmas sales are on credit. As a result, FederalWay often collects cash from the sales several months after Christmas. Assume that on November of this year, FederalWay borrowed $ million cash from Third Fifth Bank to meet shortterm obligations. FederalWay signed an interestbearing note and promised to repay the $ million in six months. The annual interest rate was percent. All interest will accrue and be paid when the note is due in six months. FederalWay's accounting period ends December
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Note: For all requirements, If no entry is required for a transactionevent select No journal entry required" in the first account field. Enter your answers in whole dollars not in millions ie not
Prepare the journal entry to record the note on November
Prepare any adjusting entry required at the end of the annual accounting period on December
Prepare the journal entry to record payment of the note and interest on the maturity date, April
Answer is not complete.
tableNoDate,,,Debit,CreditNovember Cash,Note payable,
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